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CA Intermediate · Corporate and Other Laws · Registration of Charges

Orion Pharma Ltd. created a charge to secure debentures issued as a series to the public. Which of the following correctly describes the registration requirement for the charge securing this series of debentures?

A single filing covers the whole series of debentures secured by the charge, giving details such as the total amount, the terms and the trustees. A separate filing for each debenture holder is not needed, and no capital-based threshold exempts the charge from registration.

  1. AParticulars of the charge must be filed for the whole series, with details of the debenture series, the amount and the trustees, and not separately for each debentureCorrect
  2. BA separate charge filing must be made for each individual debenture holder
  3. CNo registration is needed because debentures are securities and not loans
  4. DRegistration is required only if the debenture amount exceeds the paid-up capital

Explanation

For a series of debentures that rank equally, the charge is registered once, with particulars of the series including the total amount, date and terms, and the trustees where relevant. Separate filings per holder are not required. Option C is wrong because debentures secured by a charge need registration. Option D invents a threshold that has no basis in the law.

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